Shippers’ Council embroiled in regulatory debacle at the ports

The role of Nigerian Shippers’ Council (NSC) in easing the challenges facing the nation’s shipping sector cannot be overemphasized, even as it is embroiled in a series of litigation.

The NSC was appointed in 2014 as interim economic regulator for the shipping sector. Its role was very clear – to fill a vacuum created after the port reform over 10 years ago.

Prior to the reform, Nigerian seaports were largely inefficient and unattractive to port users. The port could not even compete with those of the neighbouring West Africa countries. The result was huge congestion at the ports and attendant diversion of cargoes to the ports of Duala, Cotonou, Lome, Tema and others in the sub-region.

The Nigerian ports were largely characterised by unnecessary long turn-around time of vessels and long cargo dwell time, prompting the imposition of what was then known as port congestion surcharge on consignment coming into the country by multinational shipping firms under the aegis of the Europe-West Africa Trade Agreement (EWATA).

Following the port reform, the Council was mandated to act as a referee in the industry as the vacuum was already making it difficult for the nation to enjoy the gains of reform, which is meant to ensure efficiency in the procedure and operations of agencies and service providers, while reducing the cost of doing business within the ports environment.

Two years on, the Council is largely seen to have instituted a level playing ground for competing interests at the ports, managed transition to a competitive market and introduced procedural transparency, policy inclusion and balancing the needs of stakeholders.

But the Executive Secretary of the Council, Hassan Bello, speaking recently on the role of the NSC as an economic regulator for Nigerian ports, noted that despite its giant strides, there was the need to harness potential areas in shipping business with a view to further reducing costs and enthroning greater efficiency.

Some maritime stakeholders expressed delight at the appointment of the Council as an economic regulator for the nation’s seaports, while others were worried over the series of litigations that have became a clog in the wheel of its operations.

The President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olanrewaju Shittu, said the NSC has done well in its regulatory role, but lacked the power of enforcement.

“It has very good intentions. But it has genuine handicaps. The court cases are hanging on it like the sword of Damocles! Although it has tried as much as possible to withdraw the cases from court, but it has not yet succeeded. Even the latest award he gave to his opponent, who took him to court, was made to look like a red earring!

“NSC would have been highly effective, if the court cases were not there. Besides, there is another case that the government acted illegally in the appointment of the Shippers Council as a port regulator.

“However, the Federal Government is behaving like a stubborn father who decides to ignore the pain or lamentation of his children. I expect that by now, the Ministry of Transport would have directly intervened; and initiated some reconciliatory measures, since it gave the advice to the Presidency to give the regulatory powers to the Executive Secretary, pending the amendment of the Act. But so far, it appears their disposition is ‘take it or leave it’. But then, everybody has a right to face the government and tell it; ‘what you are doing is wrong’; by going to court! Shittu also believe that the Alternative Dispute Resolution (ADR) should have been initiated by the Minister of Transportation.

A Maritime Lawyer, Emeka Akabogu, described the Council as a welcome development, but added that because of its enabling law, it might not be able to sanction any operator, service provider or consumer of port service.

“How effective they can sanction is going to be called to question because the essence of the economic regulator lies in its bite in terms of sanction. It will be a challenge enforcing sanctions in the absence of a statutory backing. My thinking is that since the intention is to get statutory backing but in the interim, to generally put in place broad frameworks for the regulatory functions expected of an economic regulator; I think it is a step in the right direction.

“The Council could have recorded more giant strides if it had succeeded in regulating price of services at the nation’s gateways. Its attempt in this direction was resisted by terminal operators and shipping companies which instituted a court case to stop the move. Although the case is now at the Appellate Court, following the NSC’s victory at the lower court, but if the case is eventually resolved in favour of the Council, the cost of doing business at the port will be further scaled down to the advantage of shippers,” Akabogu said.

Confirming the Council’s effort to consult stakeholders, the founder, National Association of Government Approved Freight Forwarders (NAGAFF), Boniface Aniebonam, said: “The NSC has a wonderful relationship with us in terms of sustainable engagement and we always advice them on issues of cost of freight business in our country.

Aniebonam also said the agency is ahead of its peers in the Transport Ministry in terms of competitiveness or in bringing about a better port operation.

“But the problem I have with them has to do with the enforcement of the regulation. Even an ordinary civilian has power to arrest and hand over to the appropriate authority. I have since advocated that the Nigerian Shipper’s Council must try as much as they can do to invoke the coercive force of the government.”

Continuing, he said: “Some of the things that we are talking about leading to seemingly endless litigation are criminal matters.

Cheating for instance is a criminal issue. If for instance, an approval has been given by the Transport Ministry that this should be the charges in relation to operation and you go behind and do something to the contrary, that is cheating. It is criminal. So, rather than going civil in some of these matters, the matters should be taken from the criminal angle and that is where the Inspector General of Police comes in.

“Now, the power of Mr. President has been delegated. Look at Section 5 of the Nigerian Constitution, from the Vice-President down the line; all of them have been acting on behalf of Mr. President, and the enforcement aspect of it in a civil society brings in the Inspector General of Police. What the Shipper’s Council need to do to in the course of effective regulation, is to simply make a formal letter to the Inspector General of Police and he will send people (Police officers) that will be attached to them; and that is how they can now invoke the powers of coercion, that is, to the extent of making an arrest.”